The Future for Naturals is Now: Utility Incentive Success Stories

By Keilly Witman
KW Refrigerant Management Strategy LLC

Much has been written over the past few months about the potential for utility incentives based on natural refrigerant use in supermarkets. The word “potential,” as well as the nature of the articles, suggests that utility incentives for naturals are a thing of the future. Not so! There are plenty of examples of successful incentive projects for stores that use natural refrigeration systems.

The discussion about utility incentives for naturals normally centers around how our industry can get utilities to adapt their existing incentive programs to better fit the world of natural refrigerants. But some supermarkets, equipment manufacturers, and service contractors are already finding ways to fit their natural refrigerant stores into the existing utilities incentive framework for energy efficiency.

Supermarkets are smart to get what they can.

Though it would be perfect if utilities awarded incentives for the full greenhouse gas benefit of naturals, capitalizing on utilities’ existing programs can result in financial gains for retailers today. Supermarkets are smart to get what they can, even if it is only for the energy efficiency gains that naturals bring. Though utilities are working hard to figure out how to give supermarkets even bigger incentives for the full range of naturals benefits, they are happy to give supermarkets as much money as they can for natural refrigerant energy efficiency.

Almost every utility in the nation has some kind of custom incentive program for projects that are out-of-the-box. These custom programs allow applicants to present new types of projects to utilities, like natural refrigerant stores, and make a case for the energy savings that will be achieved with those projects. There is some work involved for the applicant, i.e. some modeling and some discussions about things like baselines, but those who have participated in these processes generally agree that it was worth it. Utilities will give you incentives for energy saved by using naturals, they just aren’t ready to give you more for your direct greenhouse gas emissions reductions —yet.

These custom incentive programs are especially suitable for supermarkets because they work best in situations that demand a system-wide approach. Many utilities respond well to the notion that a store that uses a natural refrigerant system has to be taken as a whole, as opposed to refrigeration components being looked at in isolation or using a piecemeal approach. Utilities are trying to move in a more holistic direction in general, so they are familiar with the concept.

Communicate your interest in incentives for natural refrigerants.

One of the first successful utility incentive projects was at Whole Foods Market’s Brooklyn, NY, store: the first all-natural supermarket in the nation. According to Whole Foods Market, all total, three of their CO2 stores received utility incentives for energy efficiency: their Brooklyn, NY, CO2 transcritical store; their Berkeley, CA, CO2 transcritical store; and their Sacramento, CA, CO2 cascade store. Whole Foods worked with the New York State Energy Research and Development Authority (NYSERDA), the Pacific Gas and Electric Company (PG&E), and the Sacramento Municipal Utility District on the incentive projects.

It’s not a coincidence that NYSERDA worked with Whole Foods on one of the very first projects. According to Leigha Joyal, energy analyst for Hillphoenix, “NYSERDA is very receptive to natural refrigerant technologies.” She has had success with NYSERDA on incentives for four different stores that had CO2 transcritical systems or propane self-contained cases. Three of the projects were for new construction, and one was a remodel.

In a recent GreenChill webinar on utility incentives for natural refrigerant use, Joyal mentioned her work with PSEG Long Island; the Commonwealth Edison Company (ComEd), which serves Northern Illinois, including Chicago; and Duke Energy, which serves parts of Indiana, Kentucky, Ohio, North Carolina, South Carolina, and Florida. Joyal stated that the key is to communicate your interest in incentives for natural refrigerants to your utility account manager, because “the more they are presented with natural refrigerant technologies and the request for incentives for such, the more likely the utilities are to listen.

The message across the board from those with a lot of experience with utility incentives — whether its equipment manufacturers, supermarket end users, service contractors, or representatives of the utilities themselves — seems to be that it might take a while for the utilities to change course and recognize the full range of benefits that natural refrigerants bring. Most utilities can’t change course on their own. The ones that are regulated by public utility commissions have to petition those commissions to change course and start awarding incentives for total greenhouse gas emissions reductions. That can take a while.

But even if a utility can’t yet give financial incentives for the full greenhouse gas benefits of natural refrigerant systems, it is still important to calculate those benefits and make sure that the utility knows about them. Utilities are often happy to use natural refrigerant’s direct greenhouse gas reductions as examples of “non-energy benefits” when dealing with their regulatory bodies.

According to Paul Delaney, senior engineer with the Emerging Products team at Southern California Edison, once it is clear that a store will receive an incentive for energy efficiency improvements, utilities are happy to document (and even take credit for) the reduction of the overall greenhouse gas impact of the system as a “non-energy benefit,” similar to the way they document reduced water consumption for energy efficiency incentive projects.

Any opportunity to bring up naturals now to the utility providers is an opportunity to help ripen the regulators for expanded programs in the future.

Kelley Witman is the owner of KW Refrigerant Management Strategy, a consulting firm that helps the supermarket industry manage the many strategic challenges of today’s and tomorrow’s refrigeration world. In 2015, she helped found the North American Sustainable Refrigeration Council, a nonprofit that promotes the use of natural refrigerants in the grocery sector.  Prior to starting her own firm, she ran theEPA’s GreenChill Partnership, which grew to encompass more than 8,500 supermarkets during her tenure.